Exhibit
4.24


 


EXECUTION VERSION


 




 





 


MBIA INSURANCE
CORPORATION,

as Policy Provider,


 


JETBLUE AIRWAYS
CORPORATION


 


WILMINGTON TRUST COMPANY,


not in its individual capacity but solely as Subordination Agent 

and


 


WILMINGTON TRUST COMPANY,
as Trustee 

under the 

JETBLUE AIRWAYS PASS THROUGH TRUST 2004-1G-1

and

JETBLUE AIRWAYS PASS THROUGH TRUST 2004-1G-2


 


INSURANCE AND INDEMNITY AGREEMENT


 


 


JETBLUE AIRWAYS
CORPORATION


 


JETBLUE AIRWAYS PASS
THROUGH CERTIFICATES, SERIES 2004-1G-1

and

JETBLUE AIRWAYS PASS THROUGH CERTIFICATES, SERIES 2004-1G-2


 


Dated as of
March 24, 2004


 


 




 




















 


(This Table of
Contents is for convenience of reference only and shall not be deemed to be
part of this Insurance Agreement.  All
capitalized terms used in this Insurance Agreement and not otherwise defined
shall have the meanings set forth in Article I of this Insurance
Agreement.)


 


TABLE OF CONTENTS


 


	
  ARTICLE I

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DEFINITIONS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.01

  	
   

  	
  Defined Terms

  	
   

  	
   

  
	
  Section 1.02

  	
   

  	
  Other Definitional Provisions

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  REPRESENTATIONS, WARRANTIES AND
  COVENANTS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.01

  	
   

  	
  Representations and Warranties of
  JetBlue

  	
   

  	
   

  
	
  Section 2.02

  	
   

  	
  Covenants of JetBlue

  	
   

  	
   

  
	
  Section 2.03

  	
   

  	
  Covenants of the Class G Trustees and
  Subordination Agent

  	
   

  	
   

  
	
  Section 2.04

  	
   

  	
  Representations,
  Warranties and Covenants of the Policy Provider

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  THE
  POLICIES; REIMBURSEMENT; INDEMNIFICATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.01

  	
   

  	
  Issuance of the Policies

  	
   

  	
   

  
	
  Section 3.02

  	
   

  	
  Payment of Fees and Premium

  	
   

  	
   

  
	
  Section 3.03

  	
   

  	
  Reimbursement Obligation

  	
   

  	
   

  
	
  Section 3.04

  	
   

  	
  Indemnification

  	
   

  	
   

  
	
  Section 3.05

  	
   

  	
  Procedure for Payment of Fees and
  Premium

  	
   

  	
   

  
	
  Section 3.06

  	
   

  	
  Policy Endorsement

  	
   

  	
   

  
	
  Section 3.07

  	
   

  	
  Payment by Subordination Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FURTHER AGREEMENTS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.01

  	
   

  	
  Effective Date; Term of the Insurance
  Agreement

  	
   

  	
   

  
	
  Section 4.02

  	
   

  	
  Further Assurances and Corrective
  Instruments

  	
   

  	
   

  
	
  Section 4.03

  	
   

  	
  Obligations Absolute

  	
   

  	
   

  
	
  Section 4.04

  	
   

  	
  Assignments; Reinsurance; Third-Party
  Rights

  	
   

  	
   

  
	
  Section 4.05

  	
   

  	
  Liability of the Policy Provider

  	
   

  	
   

  



 


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  ARTICLE V

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.01

  	
   

  	
  Amendments, Etc

  	
   

  	
   

  
	
  Section 5.02

  	
   

  	
  Notices

  	
   

  	
   

  
	
  Section 5.03

  	
   

  	
  Severability

  	
   

  	
   

  
	
  Section 5.04

  	
   

  	
  Governing Law

  	
   

  	
   

  
	
  Section 5.05

  	
   

  	
  Consent to Jurisdiction

  	
   

  	
   

  
	
  Section 5.06

  	
   

  	
  Consent of the Policy Provider

  	
   

  	
   

  
	
  Section 5.07

  	
   

  	
  Counterparts

  	
   

  	
   

  
	
  Section 5.08

  	
   

  	
  Headings

  	
   

  	
   

  
	
  Section 5.09

  	
   

  	
  Trial by Jury Waived

  	
   

  	
   

  
	
  Section 5.10

  	
   

  	
  Limited Liability

  	
   

  	
   

  
	
  Section 5.11

  	
   

  	
  Entire Agreement

  	
   

  	
   

  
	
  Section 5.12

  	
   

  	
  Independent Agreements

  	
   

  	
   

  
	
  Section 5.13

  	
   

  	
  Successors and Assigns

  	
   

  	
   

  



 


ii

















 


INSURANCE AND
INDEMNITY AGREEMENT (as may be amended, modified or supplemented from time to
time, this “Insurance Agreement”), dated as of March  24, 2004 (the
“Closing Date”), by and among MBIA INSURANCE CORPORATION, as Policy Provider,
JETBLUE AIRWAYS CORPORATION (“JetBlue”), WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Subordination Agent (the “Subordination
Agent”), and WILMINGTON TRUST COMPANY, as Class G-1 Trustee (the
“Class G-1 Trustee”) and Class G-2 Trustee (the “Class G-2 Trustee”
and, collectively with the Class G-1 Trustee, the “Class G Trustees” and each a
“Class G Trustee”).


 


W I T N E S S E T H:


 


WHEREAS, JetBlue
intends to finance (or refinance) the acquisition of thirteen Aircraft through
separate secured loan Transactions in which JetBlue will own the Aircraft;


 


WHEREAS, on the
date of the financing or refinancing of an Aircraft, JetBlue will issue
pursuant to an Indenture, on a recourse basis, three series of Equipment Notes
to finance or refinance a portion of the purchase price of such Aircraft;


 


WHEREAS, each
Trustee under each of the Trust Agreements, will create the Trusts, which will
acquire the Equipment Notes;


 


WHEREAS,
(i) Landesbank Hessen-Thüringen Girozentrale, as Primary Liquidity
Provider, has entered into three Primary Liquidity Facilities, one for the
benefit of the Class G-1 Certificateholders, one for the benefit of the
Class G-2 Certificateholders and one for the benefit of the Class C
Certificateholders, with the Subordination Agent, as agent for each Trustee on
behalf of each Trust, (ii) Morgan Stanley Capital Services Inc., as Above-Cap
Liquidity Provider, has entered into three separate confirmations to the ISDA
Master Agreement, one for the benefit of the Class G-1 Certificateholders, one
for the Benefit of the Class G-2 Certificateholders, and one for the benefit of
the Class C Certificateholders, with the Subordination Agent, as agent for each
Trustee on behalf of each Trust, and (iii) the Trustee of each Trust, the
Primary Liquidity Provider, the Above-Cap Liquidity Provider, the Policy
Provider and the Subordination Agent have entered into the Intercreditor
Agreement;


 


WHEREAS, pursuant
to each Trust Agreement, a separate Trust has been created to facilitate the
sale of the Certificates;


 


WHEREAS, the
Policy Provider has issued two separate Policies, one in respect of the
Class G-1 Certificates and one in respect of the Class G-2
Certificates, pursuant to which it has agreed to guarantee the payment of
interest to the Subordination Agent for the benefit of the applicable Class G
Trustee and the applicable Class G Certificateholders and the payment of
principal of the applicable Class G Certificates on the Final Distribution
Date for each Class of Class G Certificates and as otherwise provided
therein; and


 


WHEREAS, each of
JetBlue, the Class G Trustees and the Subordination Agent has agreed to undertake
certain obligations in consideration for the Policy Provider’s issuance of the
Policies;


 

















 


NOW, THEREFORE, in
consideration of the premises and the mutual agreements herein contained, the
parties hereto agree as follows:


 


ARTICLE I


 


DEFINITIONS


 


Section 1.01                                Defined
Terms.  Unless the context clearly
requires otherwise, all capitalized terms used but not defined herein shall
have the respective meanings assigned to them in the Intercreditor Agreement
or, if not defined therein, in the Policies described below.  For purposes of this Insurance Agreement,
the following terms shall have the following meanings:


 


“Act” means
Part A of subtitle VII of title 49, United States Code.


 


“Aircraft”
means any aircraft which is or will be part of the Collateral.


 


“Airframe”
means any airframe which is or will be part of the Collateral.


 


“Bankruptcy
Code” means the United States Bankruptcy Code, 11 U.S.C. Section 101 et
seq.


 


“Base Rate”
means the fluctuating rate of interest as published from time to time in the
New York, New York edition of The Wall Street Journal, under the caption
“Money Rates” as the “prime rate,” the Base Rate to change when and as such
published prime rate changes.


 


“Citizen of the
United States” is defined in Section 40102(a)(15) of the Act and in
the FAA Regulations.


 


“Class G
Certificateholders” means either of the Class G-1 Certificateholders or
Class G-2 Certificateholders, as applicable.


 


“Class G
Certificates” means either of the Class G-1 Certificates or Class G-2
Certificates, as applicable.


 


“Class G
Trust” means either of the Class G-1 Trust or Class G-2 Trust, as
applicable.


 


“Class G Trust Agreement” means either of
the Class G-1 Trust Agreement or the Class G-2 Trust Agreement, as
applicable.


 


“Class G-1
Certificates” has the meaning given such term in the related Policy.


 


“Class G-1
Certificateholder” has the meaning given such term in the related Policy.


 


“Class G-1
Trust” has the meaning given such term in the related Policy.


 


2

















 


“Class G-2
Certificates” has the meaning given such term in the related Policy.


 


“Class G-2
Certificateholder” has the meaning given such term in the related Policy.


 


“Class G-2
Trust” has the meaning given such term in the related Policy.


 


“Collateral”
means the “Collateral” as defined in any Indenture with respect to an Aircraft.


 


“Delivery Date”
means with respect to each Participation Agreement, the “Closing Date” as
defined or to be defined in such Participation Agreement.


 


“Engine”
means any engine which is or will be part of the Collateral.


 


“Expenses”
means any and all liabilities, obligations, losses (other than losses from
non-reimbursement of amounts paid by the Policy Provider under each Policy),
damages, settlements, penalties, claims, actions, suits, costs, out of pocket
expenses and disbursements (including, without limitation, reasonable fees and
disbursements of legal counsel, accountants, appraisers, inspectors or other
professionals, and costs of investigation).


 


“Event of Loss”
means, with respect to an Aircraft, any Event of Loss defined or to be defined
in the Indenture related to such Aircraft.


 


“FAA” means
the Federal Aviation Administration of the United States of America or any
Government Entity succeeding to the functions of such Federal Aviation
Administration.


 


“FAA Filed
Documents” with respect to each Aircraft, has the meaning given such term
in the related Participation Agreement.


 


“Final
Dissolution Date” means following the occurrence of a Triggering Event, the
Distribution Date next succeeding the date of receipt by the Subordination
Agent of the proceeds of the sale of the last Aircraft (or the related
Equipment Notes) then subject to the Lien of any Indenture.


 


“Final
Distribution Date” means the date which is the earlier of the
(i) Final Legal Distribution Date or (ii) Final Dissolution Date.


 


“Final Legal
Distribution Date” means (i) for the Class G-1 Certificates, the Regular
Distribution Date in June 2015 and (ii) for the Class G-2 Certificates,
the Regular Distribution Date in September 2015.


 


“Financing
Statements” means collectively, UCC-1 (and, where appropriate, UCC-3)
financing statements covering in respect of each Aircraft, the related
Collateral, executed (or otherwise authorized) by JetBlue, as debtor, showing
Mortgagee as secured party, for filing in Delaware and each other jurisdiction
in which such filing is made.


 


3

















 


“GAAP”
means generally accepted accounting principles as set forth in the statements
of financial accounting standards issued by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants, as such
principles may at any time or from time to time be varied by any applicable
financial accounting rules or regulations issued by the SEC and, with respect
to any Person, shall mean such principles applied on a basis consistent with
prior periods except as may be disclosed in such Person’s financial statements.


 


“Government
Entity” means (a) any federal, state, provincial or similar
government, and any body, board, department, commission, court, tribunal,
authority, agency or other instrumentality of any such government or otherwise
exercising any executive, legislative, judicial, administrative or regulatory
functions of such government or (b) any other government entity having
jurisdiction over any matter contemplated by the Operative Agreements or
relating to the observance or performance of the obligations of any of the
parties to the Operative Agreements.


 


“Indemnification
Agreement” means the Indemnification Agreement, dated as of March 18,
2004 among the Policy Provider, JetBlue and the Underwriters.


 


“Insurance
Agreement” has the meaning given such term in the initial paragraph hereof.


 


“Intercreditor
Agreement” means the Intercreditor Agreement, dated as the date hereof by
and among Wilmington Trust Company, as Trustee under each Trust, the Primary
Liquidity Provider, the Above-Cap Liquidity Provider, the Subordination Agent
and the Policy Provider.


 


“Investment
Company Act” means the Investment Company Act of 1940, including, unless
the context otherwise requires, the rules and regulations thereunder, as
amended from time to time.


 


“Lien”
means any mortgage, pledge, lien, charge, encumbrance or security interest affecting
the title to or any interest in property.


 


“Material
Adverse Change” means, in respect of any Person as at any date, a material
adverse change in the ability of such Person to perform its obligations under
any of the Operative Agreements to which it is a party as of such date,
including any material adverse change in the business, financial condition,
results of operations or properties of such Person on a consolidated basis with
its subsidiaries which might have such effect.


 


“Moody’s”
means Moody’s Investors Service, Inc., and any successor thereto.


 


“Mortgagee”
with respect to each Aircraft means Wilmington Trust Company in its capacity as
Loan Trustee under the related Indentures.


 


“Offering
Document” means the Prospectus Supplement dated March 18, 2004
together with the Prospectus dated March 4, 2004.


 


4

















 


“Operative
Agreements” means this Insurance Agreement, each Policy, the
Indemnification Agreement, the Intercreditor Agreement, each Participation Agreement,
each Indenture, the Note Purchase Agreement, the Series G-1 Equipment Notes,
the Series G-2 Equipment Notes, the Class G-1 Certificates, the
Class G-2 Certificates, the Primary Liquidity Facilities for the Class G
Certificates, the Above-Cap Liquidity Facilities for the Class G Certificates,
the Escrow and Paying Agent Agreements relating to the Class G-1 Certificates
and the Class G-2 Certificates, respectively, the Deposit Agreements relating
to the Class G-1 Certificates and the Class G-2 Certificates, respectively, the
Class G-1 Trust Agreement, the Class G-2 Trust Agreement and the
Policy Fee Letter, together with all exhibits and schedules included with any
of the foregoing.


 


“Permitted
Liens” has the meaning given to such term in the Indenture.


 


“Person”
means an individual, joint stock company, trust, unincorporated association,
joint venture, corporation, business or owner trust, partnership or other
organization or entity (whether governmental or private).


 


“Policy”
means (i) for the Class G-1 Certificates, the Financial Guaranty Insurance
Policy No. 43567(1), together with all endorsements thereto, issued by the
Policy Provider in favor of the Subordination Agent, for the benefit of the
Class G-1 Certificateholders as each of the same may be amended from time
to time in accordance with the terms of the Intercreditor Agreement and (ii)
for the Class G-2 Certificates, the Financial Guaranty Insurance Policy
No. 43567(2), together with all endorsements thereto, issued by the Policy
Provider in favor of the Subordination Agent, for the benefit of the
Class G-2 Certificateholders as each of the same may be amended from time
to time in accordance with the terms of the Intercreditor Agreement.


 


“Policy Fee
Letter” means the fee letter, dated as of March 24, 2004 from the
Policy Provider to JetBlue and the Subordination Agent setting forth the
Premium (as defined therein) and certain other amounts payable in respect of
the Policies.


 


“Policy
Provider” means MBIA Insurance Corporation, or any successor thereto, as
issuer of each Policy.


 


“Policy
Provider Information” means the information set forth under the caption
“Description of the Policy Provider” in the Offering Document including
information set forth in the documents incorporated by reference therein.


 


“S&P”
means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and any successor thereto.


 


“SEC” means
the Securities and Exchange Commission of the United States of America, or any
successor thereto.


 


“Section 1110”
means 11 U.S.C. § 1110 of the Bankruptcy Code or any successor or
analogous section of the federal bankruptcy law in effect from time to
time.


 


5

















 


“Securities Act”
means the Securities Act of 1933, including, unless the context otherwise
requires, the rules and regulations thereunder, as amended from time to time.


 


“Security”
means a “Security” as defined in Section 2(1) of the Securities Act.


 


“Series G-1
Equipment Notes” means the floating rate Series G-1 Equipment Notes issued
pursuant to any Indenture by JetBlue and authenticated by the Loan Trustee
thereunder, and any Equipment Notes issued in exchange therefor or replacement
thereof pursuant to the terms of such Indenture.


 


“Series G-2
Equipment Notes” means the floating rate Series G-2 Equipment Notes issued
pursuant to any Indenture by JetBlue and authenticated by the Loan Trustee
thereunder, and any Equipment Notes issued in exchange therefor or replacement
thereof pursuant to the terms of such Indenture.


 


“Transactions”
means the transactions contemplated by the Operative Agreements, including the
transactions described in the Offering Document.


 


“Trust Property”
with respect to any Trust, has the meaning given in the Trust Agreement for
such Trust.


 


“UCC” means
the Uniform Commercial Code as in effect in any applicable jurisdiction.


 


“Underwriting
Agreement” means the Underwriting Agreement, dated March 18, 2004
among the Underwriters and JetBlue, relating to the purchase of the
Certificates by the Underwriters, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.


 


“U.S. Air
Carrier” means any United States air carrier that is a Citizen of the
United States holding an air carrier operating certificate issued by the
Secretary of Transportation pursuant to the Act for aircraft capable of
carrying 10 or more individuals or 6,000 pounds or more of cargo, and as
to which there is in force an air carrier operating certificate issued pursuant
to Part 121 of the FAA Regulations, or which may operate as an air carrier by
certification or otherwise under any successor or substitute provisions
therefor or in the absence thereof.


 


Section 1.02                                Other
Definitional Provisions.  The words
“hereof,” “herein” and “hereunder” and words of similar import when used in
this Insurance Agreement shall refer to this Insurance Agreement as a whole and
not to any particular provision of this Insurance Agreement, and Section,
subsection, Schedule and Exhibit references are to this Insurance
Agreement unless otherwise specified. 
The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.  The words “include” and “including” shall be deemed to be
followed by the phrase “without limitation.”


 


6

















 


ARTICLE II


 


REPRESENTATIONS, WARRANTIES AND COVENANTS


 


Section 2.01                                Representations
and Warranties of JetBlue.  JetBlue
represents and warrants as of the Closing Date and as of each Delivery Date as
follows:


 


(a)                                  Organization;
Qualification.  JetBlue is a
corporation duly incorporated, validly existing, in good standing under the
laws of the State of Delaware and has the corporate power and authority to
conduct its business in which it is currently engaged and to own or hold under
lease its properties and to enter into and perform its obligations under the
Operative Agreements to which it is a party as of such date.  JetBlue is duly qualified to do business as
a foreign corporation in good standing in each jurisdiction in which the nature
and extent of the business conducted by it, or the ownership of its properties,
requires such qualification, except where the failure to be so qualified would
not give rise to a Material Adverse Change to JetBlue.


 


(b)                                 Corporate
Authorization.  JetBlue has taken,
or caused to be taken, all necessary corporate action (including, without
limitation, the obtaining of any consent or approval of stockholders required
by its certificate of incorporation or by-laws) to authorize the execution and
delivery of each of the Operative Agreements to which it is a party as of such
date, and the performance of its obligations thereunder.


 


(c)                                  No
Violation.  The execution and
delivery by JetBlue of the Operative Agreements to which it is a party as of
such date, the performance by JetBlue of its obligations thereunder and the
consummation by JetBlue of the Transactions contemplated thereby, do not and
will not (a) violate any provision of the certificate of incorporation or
by-laws of JetBlue, (b) violate any law, regulation, rule or order
applicable to or binding on JetBlue or (c) violate or constitute any
default under (other than any violation or default that would not result in a
Material Adverse Change to JetBlue), or result in the creation of any Lien
(other than Permitted Liens) upon the Aircraft under, any indenture, mortgage,
chattel mortgage, deed of trust, conditional sales contract, lease, loan or
other material agreement, instrument or document to which JetBlue is a party or
by which it or any of its properties is bound.


 


(d)                                 Approvals.  The execution and delivery by JetBlue of the
Operative Agreements to which it is a party as of such date, the performance by
JetBlue of its obligations thereunder and the consummation on such date by
JetBlue of the Transactions contemplated thereby do not and will not require
the consent or approval of, or the giving of notice to, or the registration
with, or the recording or filing of any documents with, or the taking of any
other action in respect of, (a) any trustee or other creditor of JetBlue
and (b) any Government Entity, other than the filing of (w) the FAA
Filed Documents and the Financing Statements (and continuation statements
periodically), (x) filings, recordings, notices or other ministerial
actions pursuant to any routine recording, contractual or regulatory
requirements applicable to it, (y) filings, recordings, notices or other
actions contemplated by the Operative Agreements in connection with the leasing,
subleasing or re-registration of the Aircraft and (z) filings, recordings,
notices or other actions all of which have either been, or will be, completed
on or prior to such date and will be in full force and effect on such date.


 


7

















 


(e)                                  Valid
and Binding Agreements.  The
Operative Agreements executed and delivered by JetBlue on or prior to such date
have been duly executed and delivered by JetBlue and, assuming the due
authorization, execution and delivery thereof by the other party or parties
thereto, constitute the legal, valid and binding obligations of JetBlue and are
enforceable against JetBlue in accordance with the respective terms thereof,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws affecting the
rights of creditors generally and general principles of equity, whether
considered in a proceeding at law or in equity and subject to principles of
public policy limiting the right to enforce the indemnification provisions
contained herein, insofar as such provisions relate to indemnification for
liabilities arising under federal securities laws.


 


(f)                                    Litigation.  Except as set forth in JetBlue’s most recent
Annual Report on Form 10-K, as amended, filed by JetBlue with the SEC on
or prior to the Closing Date or such Delivery Date, as the case may be, or in
any Quarterly Report on Form 10-Q or Current Report on Form 8-K filed by
JetBlue with the SEC subsequent to such Form 10-K, no action, claim or
proceeding is now pending or, to the actual knowledge of JetBlue, threatened,
against JetBlue, before any court, governmental body, arbitration board,
tribunal or administrative agency, which is reasonably likely to be determined
adversely to JetBlue and, if determined adversely to JetBlue, is reasonably
likely to result in a Material Adverse Change.


 


(g)                                 Financial
Condition.  The audited consolidated
balance sheet of JetBlue with respect to JetBlue’s most recent fiscal year
included in JetBlue’s most recent Annual Report on Form 10-K, as amended,
filed by JetBlue with the SEC, and the related consolidated statements of
operations and cash flows for the period then ended have been prepared in
conformity with GAAP and present fairly in all material respects the financial
condition of JetBlue and its consolidated subsidiaries as of such date and the
results of its operations and cash flows for such period, and since the date of
such balance sheet, there has been no Material Adverse Change in such financial
condition or operations of JetBlue, except for matters disclosed in
(a) the financial statements referred to above or (b) any subsequent
Quarterly Report on Form 10-Q, Current Report on Form 8-K or any press
release issued by JetBlue filed by JetBlue with the SEC on or prior to the
Closing Date or such Delivery Date, as the case may be.


 


(h)                                 Registration
and Recordation.  In respect of each
Aircraft, except for (a) the registration of the Aircraft with the FAA
pursuant to the Act in the name of JetBlue, (b) the filing for recordation
(and recordation) of the FAA Filed Documents relating to such Aircraft,
(c) the filing of the Financing Statements relating to such Aircraft (and
continuation statements relating thereto at periodic intervals), and
(d) the affixation of the nameplates referred to in Section 4.02(e)
of the related Indenture with respect to such Aircraft, on the Delivery Date
with respect to such Aircraft, no further action, including any filing or
recording of any document (including any financing statement in respect thereof
under Article 9 of the UCC) is necessary in order to establish and perfect
in respect of such Aircraft, the Mortgagee’s first priority perfected security
interest in such Aircraft (subject only to Permitted Liens as defined in the
related Indenture), as against JetBlue and any other Person, in each case, in
any applicable jurisdictions in the United States.


 


(i)                                     Location.  The “location” (as such term is used in
Section 9-307 of Article 9 of the UCC) of JetBlue is the State of
Delaware.


 


8

















 


(j)                                     No
Default.  On such Delivery Date, in
respect of each Aircraft delivered on such date, no event which would
constitute an Event of Default (as defined in the Indenture for such Aircraft)
and no event or condition that with the giving of notice or the lapse of time
or both would become an Event of Default has occurred and is continuing.


 


(k)                                  No
Event of Loss.  With respect to such
Delivery Date, no Event of Loss has occurred with respect to the Airframe or
any Engine which is Collateral under each Indenture executed as of such
Delivery Date, and to the actual knowledge of JetBlue, no circumstance,
condition, act or event has occurred that, with the giving of notice or lapse
of time or both gives rise to or constitutes an Event of Loss with respect to
such Airframe or any such Engine.


 


(l)                                     Compliance
with Laws.


 


(i)                                     JetBlue
is a Citizen of the United States and a U.S. Air Carrier.


 


(ii)                                  JetBlue
holds all licenses, permits and franchises from the appropriate Government
Entities necessary to authorize JetBlue to lawfully engage in air
transportation and to carry on scheduled commercial passenger service as
currently conducted, except where the failure to so hold any such license,
permit or franchise would not give rise to a Material Adverse Change to
JetBlue.


 


(iii)                               JetBlue
is not an “investment company” or a company controlled by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.


 


(m)                               Securities
Laws.  Neither JetBlue nor any
person authorized to act on its behalf has directly or indirectly offered any
beneficial interest or Security relating to the ownership of the Aircraft or
any interest in any Trust Property and Trust Agreement, or any of the Equipment
Notes or any other interest in or security under any Indenture, for sale, to,
or solicited any offer to acquire any such interest or security from, or has
sold any such interest or security to, any Person in violation of the Securities
Act.


 


(n)                                 Section 1110.  With respect to each Aircraft delivered on
such Delivery Date, the related Mortgagee is entitled to the benefits of
Section 1110 (as in effect on such date) in the event of a case under
Chapter 11 of the Bankruptcy Code in which JetBlue is a debtor.


 


(o)                                 Accuracy
of Information.  Neither the
Operative Agreements to which it is a party as of such date nor other material
information relating to the Aircraft or the operations or financial condition
of JetBlue furnished to the Policy Provider contain any statement of a material
fact which was untrue or misleading in any material respect when made.  JetBlue has no knowledge of any
circumstances that could reasonably be expected to cause a Material Adverse
Change with respect to JetBlue except for matters disclosed in (i) the
financial statements referred to above or (ii) any subsequent Quarterly
Report on Form 10-Q, Current Report on Form 8-K or any press release
issued by JetBlue filed by JetBlue with the SEC on or prior to the Closing Date
or such Delivery Date, as the case may be.


 


9

















 


Section 2.02                                Covenants
of JetBlue.  JetBlue covenants and
agrees with the Policy Provider as follows:


 


(a)                                  Without
the prior written consent of the Policy Provider (which may be granted or
withheld in its sole discretion), it will not vary any of the terms in any
Operative Agreements in any material respect as regards to the interests,
rights and remedies of the Policy Provider from those in the forms attached to
the Note Purchase Agreement.


 


(b)                                 Notwithstanding
that the related Aircraft is in the possession of a lessee or sublessee, in all
circumstances the Aircraft shall be maintained in accordance with the
maintenance standards required by, or substantially equivalent to those
required by, the FAA or any other applicable civil aviation authority.


 


(c)                                  It
shall not, and shall not suffer any of its Affiliates to, purchase or otherwise
acquire any of the Class G-1 Certificates or Class G-2 Certificates.


 


(d)                                 Documentation.  In connection with any Financing Agreement
(as defined in the Note Purchase Agreement), the Policy Provider shall receive
(a) a copy, delivered on or promptly (but in no event more than 10 days)
after the applicable Delivery Date, of each opinion of counsel addressed to
S&P and the Indenture Trustee, in respect of JetBlue and the Subordination
Agent or any of the other parties to the Operative Agreements and the
Transactions, dated such Delivery Date and in form and substance reasonably satisfactory
to the Policy Provider, addressed to the Policy Provider (or accompanied by a
letter from the counsel rendering such opinion to the effect that the Policy
Provider is entitled to rely on such opinion as of its date as if it were
addressed to the Policy Provider) and addressing such matters as the Policy
Provider may reasonably request, and the counsel providing each such opinion
shall have been instructed by its client to deliver such opinion to the
addressees thereof and (b) a copy, delivered upon or promptly (but in no
event more than 10 days) after receipt following recordation, of each Financing
Statement and each document recorded with the FAA.  For the purposes of this Section 2.02(d), delivery of the
Policy by the Policy Provider shall be deemed to be consent by the Policy
Provider to the forms of opinions of counsel provided as Exhibits A-E to the
Participation Agreement.


 


(e)                                  JetBlue
shall comply with the provisions of the Operative Documents relating to
maintenance, operation, leasing, subleasing and country of reregistration of
the Aircraft.


 


(f)                                    With
respect to any individual Aircraft financed under an Indenture, JetBlue shall
not use debt represented by Class G Certificates in such financing that would
create a loan to Aircraft value ratio (as described under the “Summary — Loan
to Aircraft Value Ratios” in the Offering Document) in excess of 51.3%.


 


(g)                                 Insurance.  JetBlue shall comply with, or cause to be
complied with, the insurance provisions set forth in Section 4.06 of each
Indenture, including Annex B thereto, and the provisions of Annex A
hereto, which provisions are hereby incorporated by this reference as if set
forth in full herein; provided that to the extent that Annex A conflicts with
either Section 4.06 of any Indenture or Annex B thereto, the provisions of
Annex A shall control; provided


 


10

















 


further that the Policy
Provider agrees to accept, in lieu of insurance against any risk with respect
to which insurance is required under this Section 2.02(g), indemnification
from, or insurance provided by, the U.S. Government (as defined in each
Indenture) or, upon the written consent of the Mortgagee (as defined in each
Indenture), other Government Entity (as defined in each Indenture), against
such risk in an amount that, when added to the amount of insurance (including
permitted self-insurance), if any, against such risk that JetBlue (or any
Permitted Lessee (as defined in each Indenture)) may continue to maintain, in
accordance with this Section 2.02(g), shall be at least equal to the
amount of insurance against such risk otherwise required by this
Section 2.02(g).


 


Section 2.03                                Covenants
of the Class G Trustees and Subordination Agent.  The Class G Trustees and Subordination Agent shall perform and
observe, in all material respects, all of its covenants, obligations and
agreements in any Operative Agreement to which it is a party to be observed or
performed by it.


 


Section 2.04                                Representations,
Warranties and Covenants of the Policy Provider.  The Policy Provider represents, warrants and covenants to JetBlue
and the Subordination Agent as follows:


 


(a)                                  Organization
and Licensing.  The Policy Provider
is duly organized, validly existing and in good standing as a New
York-domiciled stock insurance company duly qualified to conduct an insurance
business in every jurisdiction where qualification may be necessary to
accomplish the Transactions.


 


(b)                                 Corporate
Power.  The Policy Provider has the
corporate power and authority to issue each Policy, to execute and deliver this
Insurance Agreement and the other Operative Agreements to which it is a party
and to perform all of its obligations hereunder and thereunder.


 


(c)                                  Authorization;
Approvals.  Except as have already
been obtained, no authorization, consent, approval, license, formal exemption
or declaration from, nor any registration or filing with, any court or
governmental agency or body of the United States of America or the State of New
York, which if not obtained would affect or impair the validity or
enforceability of either Policy against the Policy Provider, is required in
connection with the execution and delivery by the Policy Provider of the
Policies or this Insurance Agreement or in connection with the Policy
Provider’s performance of its obligations thereunder or hereunder.


 


(d)                                 Enforceability.  This Insurance Agreement constitutes, and
each Policy, when issued, will constitute, a legal, valid and binding
obligation of the Policy Provider, enforceable in accordance with its terms, subject
to bankruptcy, insolvency, reorganization, moratorium, receivership and other
similar laws affecting creditors’ rights generally as they would apply in the
event of the bankruptcy, receivership, insolvency or similar proceeding of the
Policy Provider and to general principles of equity and subject to principles
of public policy limiting the right to enforce the indemnification provisions
contained herein, insofar as such provisions relate to indemnification for
liabilities arising under federal securities laws.


 


11

















 


(e)                                  Exemption
from Registration.  The Policies are
exempt from registration under the Securities Act.


 


(f)                                    No
Conflicts.  Neither the execution or
delivery by the Policy Provider of the Policies and the Operative Agreements to
which it is a party, nor the performance by the Policy Provider of its
obligations thereunder, will conflict with any provision of the certificate of
incorporation or the bylaws of the Policy Provider nor result in a breach of,
or constitute a default under, any material agreement or other instrument to
which the Policy Provider is a party or by which any of its property is bound
nor violate any judgment, order or decree applicable to the Policy Provider of
any governmental or regulatory body, administrative agency, court or arbitrator
having jurisdiction over the Policy Provider to the extent any such conflict,
breach, default or violation would result in a Material Adverse Change in the
financial results or operations of the Policy Provider or impairs the Policy
Provider’s ability to perform its obligations under each Policy or any of the
Operative Agreements.


 


(g)                                 Financial
Information.  The consolidated
financial statements of the Policy Provider and its subsidiaries as of
December 31, 2003 and December 31, 2002 and for each of the three
years in the period ended December 31, 2003, and the accompanying
footnotes, together with a report thereon of PricewaterhouseCoopers,
independent certified public accountants, included in the Annual Report on
Form 10-K of MBIA Inc. for the year ended December 31, 2003,
incorporated by reference into the Offering Document, fairly present in all
material respects the financial condition of the Policy Provider and its
subsidiaries as of such dates and for the periods covered by such statements in
accordance with generally accepted accounting principles consistently
applied.  Since December 31, 2003,
there has been no change in the financial condition of the Policy Provider and
its subsidiaries that would materially and adversely affect the Policy
Provider’s ability to perform its obligations under the Policies.


 


(h)                                 Policy
Provider Information.  The
information with respect to the Policy Provider set forth or incorporated by
reference in the section of the Offering Document contained therein
captioned “Description of the Policy Provider” does not purport to provide the
scope of disclosure required to be included by the Securities Act with respect
to a registrant in connection with the offer and sale of securities of such
registrant.  However, the information in
such section does not contain any untrue statement of a material fact and
did not omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.


 


(i)                                     No
Litigation.  There are no actions,
suits, proceedings or investigations pending or, to the best of the Policy
Provider’s knowledge, threatened against it at law or in equity or before or by
any court, governmental agency, board or commission or any arbitrator which, if
decided adversely, would materially and adversely affect its ability to perform
its obligations under the Policies or this Insurance Agreement.


 


(j)                                     Compliance
with Law, Etc.  No practice,
procedure or policy employed, or proposed to be employed, by the Policy
Provider in the conduct of its business violates any law, regulation, judgment,
agreement, order or decree applicable to the Policy Provider that, if enforced,
could result in a Material Adverse Change with respect to the Policy Provider.


 


12

















 


ARTICLE III


 


THE POLICIES; REIMBURSEMENT;
INDEMNIFICATION


 


Section 3.01                                Issuance
of the Policies.  The Policy Provider
agrees to issue each Policy on the Closing Date subject to satisfaction of the
conditions precedent set forth below on or prior to the Closing Date:


 


(a)                                  Operative
Agreements.  The Policy Provider
shall have received a copy of (i) each of the Operative Agreements to be
executed and delivered on or prior to the Closing Date, in form and substance
reasonably satisfactory to the Policy Provider, duly authorized, executed and
delivered by each party thereto and (ii) a copy of the Offering Document;


 


(b)                                 Certified
Documents and Resolutions.  The
Policy Provider shall have received (i) a copy of the applicable
organizational documents of JetBlue and (ii) a certificate of the
Secretary or Assistant Secretary of JetBlue dated the Closing Date stating that
attached thereto is a true, complete and correct copy of resolutions duly
adopted by the Board of Directors of JetBlue authorizing the execution,
delivery and performance by JetBlue of the Operative Agreements to which it is
a party and the consummation of the Transactions and that such applicable
organizational documents and resolutions are in full force and effect without
amendment or modification on the Closing Date;


 


(c)                                  Incumbency
Certificate.  The Policy Provider
shall have received a certificate of the Secretary or an Assistant Secretary of
each of JetBlue and the Subordination Agent certifying the names and signatures
of the officers of JetBlue and the Subordination Agent authorized to execute
and deliver the Operative Agreements to which it is a party on or prior to
Closing Date and that, with respect to JetBlue, shareholder consent to the
execution and delivery of such documents by JetBlue, is not necessary or has
been obtained;


 


(d)                                 Representations
and Warranties.  The representations
and warranties of JetBlue and the Subordination Agent dated the Closing Date
set forth or incorporated by reference in this Insurance Agreement shall be
true and correct on and as of the Closing Date;


 


(e)                                  Documentation.  The Policy Provider shall have received a
copy of each document, instrument, certificate and opinion delivered on or
before the Closing Date pursuant to the Operative Agreements and the
Underwriting Agreement (except for the 10b-5 opinion, the comfort letters of
Ernst & Young LLP and the opinion of Shearman & Sterling LLP as counsel
to the Underwriters), including each opinion of counsel addressed to any of
Moody’s, S&P, the Class G Trustees, JetBlue and the Subordination Agent, in
respect of JetBlue and the Subordination Agent or any of the other parties to
the Operative Agreements and the Transactions dated the Closing Date in form
and substance reasonably satisfactory to the Policy Provider, addressed to the
Policy Provider (or accompanied by a letter from the counsel rendering such
opinion to the effect that the Policy Provider is entitled to rely on such
opinion as of its date as if it were addressed to the Policy Provider) and
addressing such matters as the Policy Provider may reasonably request, and the
counsel providing each such opinion shall have been instructed by its client to
deliver such opinion to the addressees thereof;


 


13

















 


(f)                                    Approvals,
Etc.  The Policy Provider shall have
received true and correct copies of all approvals, licenses and consents, if
any, including any required approval of the shareholders of JetBlue, required
in connection with the Transactions;


 


(g)                                 No
Litigation, Etc.  No suit, action or
other proceeding, investigation or injunction, or final judgment relating
thereto, shall be pending or threatened before any court, governmental or
administrative agency or arbitrator in which it is sought to restrain or
prohibit or to obtain damages or other relief in connection with any of the
Operative Agreements or the consummation of the Transactions;


 


(h)                                 Legality.  No statute, rule, regulation or order shall
have been enacted, entered or deemed applicable by any government or
governmental or administrative agency or court that would make the Transactions
illegal or otherwise prevent the consummation thereof;


 


(i)                                     Issuance
of Ratings.  The Policy Provider
shall have received confirmation that the risk secured by the applicable Policy
is rated no lower than “BBB+” by S&P and “Baa1” by Moody’s, the
Class G-1 Certificates and Class G-2 Certificates, when issued, will each
be rated “AAA” by S&P and “Aaa” by Moody’s, and that the Class C
Certificates, when issued, will be rated “BB+” by S&P and “Ba1” by Moody’s,
and shall have received the confirmation from S&P of a capital charge
acceptable to the Policy Provider;


 


(j)                                     Satisfactory
Documentation.  The Policy Provider
and its counsel shall have reasonably determined that all documents,
certificates and opinions to be delivered in connection with the Certificates
conform to the terms of the related Trust Agreement, the Offering Document,
this Insurance Agreement and the Intercreditor Agreement;


 


(k)                                  Filings.  The Policy Provider shall have received
evidence that there shall have been made and shall be in full force and effect,
all filings, recordings and registrations, and there shall have been given or
taken any notice or similar action as is necessary in order to establish,
perfect, protect and preserve the right, title and interest of the Policy
Provider created by the Operative Agreements executed and delivered on or prior
to the Closing Date;


 


(l)                                     Conditions
Precedent.  All conditions precedent
to the issuance of the Certificates under the Trust Agreements shall have been
satisfied or waived (with the consent of the Policy Provider).  All conditions precedent to the
effectiveness of the Liquidity Facilities shall have been satisfied or waived;
and


 


(m)                               Expenses.  The Policy Provider shall have received
payment in full of all amounts required to be paid to or for account of the
Policy Provider on or prior to the Closing Date.


 


Section 3.02                                Payment
of Fees and Premium.  (a)  Legal Fees.  The
Policy Provider shall be entitled to payment of the Policy Provider’s
attorneys’ fees and all other reasonable and actual fees expenses and
disbursements (including without limitation accountants’ fees) incurred by the
Policy Provider in connection with the negotiation, preparation, execution and
delivery of the Offering Documents, the Operative Agreements and all other
documents delivered with respect thereto. 
Such attorney’s fees and expenses shall be


 


14

















 


payable by JetBlue on the
Closing Date upon the presentation of an invoice for any such fees, costs and
expenses.


 


(b)                                 Rating
Agency Fees.  The Policy Provider shall
be entitled to reimbursement for all periodic rating agency fees, expenses and
disbursements incurred by the Policy Provider, and not invoiced by a rating
agency directly to JetBlue, in connection with the transactions described
herein and in the Operative Agreements, such reimbursement to be made by
JetBlue within 30 days of presentation of an invoice therefor; provided that JetBlue shall only be liable for
such fees, expenses and disbursements incurred by the Policy Provider as a
result of a request from a rating agency or reasonable requests by the Policy
Provider for rating agency review of the transactions described herein
and in the Operative Documents.


 


(c)                                  [Reserved]


 


(d)                                 Premium.


 


(i)                                     In
consideration of the issuance by the Policy Provider of each Policy, JetBlue
shall pay or cause to be paid to the Policy Provider, the Premium and such
additional amounts, in each case, as and when due, in accordance with the
Policy Fee Letter.


 


(ii)                                  No
portion of the Premium paid shall be refundable without regard to whether the
Policy Provider makes any payment under either Policy or any other
circumstances relating to the Class G Certificates or provision being made
for payment of the Class G Certificates prior to maturity.


 


Section 3.03                                Reimbursement
Obligation.  (a)  As and when due in accordance with
and from the funds specified in Sections 2.4(a) and 3.2 of the
Intercreditor Agreement, the Policy Provider shall be entitled to reimbursement
for any payment made by the Policy Provider under either Policy or to the
Primary Liquidity Provider under Section 2.6(c) and 3.7(c) of the
Intercreditor Agreement, which reimbursement shall be due and payable on the
date provided in such Sections, in an amount equal to the sum of the amount to
be so paid and all amounts previously paid that remain unreimbursed, plus
accrued and unpaid interest thereon from the date such amounts became due until
paid in full (as well as before judgment), at a rate of interest equal to the
greater of (i) the Base Rate plus 1% and (ii) the applicable interest rate on
the Series G-1 Equipment Notes (in the case of a drawing under the Policy in
respect of the Class G-1 Certificates) or on the Series G-2 Equipment Notes (in
the case of a drawing under the Policy in respect of the Class G-2 Certificates),
plus, in each case, 1%; provided that, for the avoidance of doubt, any
obligation to pay interest that is created by this Section 3.03(a) shall
be a non-recourse obligation of JetBlue and such accrued interest shall be
payable solely from amounts distributed pursuant to Sections 2.4(a) and 3.2 of
the Intercreditor Agreement and JetBlue shall not be liable for any shortfall
that may arise as a result thereof.  In
addition, to the extent that any such payment by the Policy Provider shall have
been made as a result of a default by a Primary Liquidity Provider in its
obligation to make an Advance, as provided in the Intercreditor Agreement, the
Policy Provider shall be entitled to the payment of interest on such amounts to
the extent, at the time and in the priority that the Primary Liquidity Provider
would have been


 


15

















 


paid pursuant to the
Intercreditor Agreement had the Primary Liquidity Provider made such Advance up
to a maximum of six such payments by the Policy Provider.


 


(b)                                 [Reserved]


 


(c)                                  JetBlue
agrees to pay to the Policy Provider any and all charges, fees, costs and
expenses and disbursements that the Policy Provider may reasonably pay or
incur, including reasonable attorneys’ and accountants’ fees and expenses
(without duplication of amounts paid to the Policy Provider in respect of the
Operative Agreements), in connection with (i) the enforcement, defense or
preservation of any rights in respect of any of the Operative Agreements, including
defending, monitoring or participating in any litigation or proceeding and
(ii) any amendment, waiver or other action requested by JetBlue with
respect to, or related to, any Operative Agreements or to any form document
attached to any Operative Agreement as exhibit, schedule or annex thereto,
whether or not executed or completed. 
Such reimbursement shall be due on the dates on which such charges,
fees, costs, expenses and disbursements are paid or incurred by the Policy
Provider.


 


Section 3.04                                Indemnification.  JetBlue agrees (i) that the Policy
Provider, upon execution and delivery thereof, will be entitled to the full
benefit of the General Indemnity contained in Section 7 of each
Participation Agreement as if such provisions were set forth in full herein,
the Policy Provider were an Indemnitee (as defined in the related Participation
Agreement) thereunder and the Operative Agreements referred to therein include
this Insurance Agreement and (ii) that it shall name the Policy Provider
as an Indemnitee in each Participation Agreement and that the Policy Provider
shall be entitled to the full benefit of the General Indemnity provisions set
forth in or incorporated by reference in each Participation Agreement;
provided, however, any exclusion contained in any Participation Agreement or
form thereof related to any representation or warranty by any Indemnitee other
than the Policy Provider, the failure by any Indemnitee other than the Policy
Provider to perform or observe any agreement, covenant or condition in any of
the Operative Agreements, the acts or omissions involving the willful
misconduct or gross negligence of any Indemnitee other than the Policy Provider
or any other action or omission of any other Person other than the Policy
Provider shall not apply to the indemnification obligations of JetBlue to the
Policy Provider and to the extent not paid, all money due under this 3.04 shall
constitute Policy Provider Obligations (as defined in the Intercreditor
Agreement).


 


Section 3.05                                Procedure
for Payment of Fees and Premium.  (a)  All payments to
the Policy Provider hereunder shall be made in lawful currency of the United
States and in immediately available funds and shall be made prior to 2:00 p.m.
(New York City time) on the date such payment is due by wire transfer to
JPMorgan Chase Bank, ABA #021 000 021 for credit to MBIA Insurance
Corporation Premium Account, Account No. 910-2-721728
Re:  JetBlue Airways Pass Through Trust 2004-1, or to such other
office or account as the Policy Provider may direct.  Payments received by the Policy Provider after 2:00 p.m. (New
York City time) shall be deemed to have been received on the next succeeding
Business Day, and such extension of time shall be included in computing
interest, commissions or fees, if any, in connection with such payment.


 


16

















 


(b)                                 Unless
otherwise specified herein, the Policy Provider shall be entitled to interest
on all amounts owed to the Policy Provider under this Insurance Agreement, from
the date such amounts become due and payable until paid in full, at a rate of
interest equal to the Base Rate from time to time in effect plus 1%.


 


(c)                                  Unless
otherwise specified herein, interest payable to the Policy Provider under this
Insurance Agreement shall be calculated on the basis of a 365 day year and the
actual number of days elapsed and shall be payable on demand.


 


Section 3.06                                Policy
Endorsement.  Regardless of whether
or not the Policy Provider makes a Policy Provider Election, the Policy
Provider shall, on the first Business Day (which shall be a Special
Distribution Date) that is 21 months after the last date on which full payment
was made on the first Series G-1 Equipment Note or Series G-2 Equipment Note,
as applicable, as to which there has subsequently been a failure to pay
principal or that has been accelerated, endorse the applicable Policy, if not
already endorsed, to so provide for the payment to the Liquidity Provider of
interest accruing on the outstanding drawings in respect of the Class G-1
and Class G-2 Liquidity Facilities from and after the end of such 21-month
period as and when such interest becomes due in accordance with such Liquidity
Facilities.


 


Section 3.07                                Payment
by Subordination Agent.  (a)  All of the fees, expenses
and disbursements set forth in Sections 3.02 and 3.03(c) shall be payable
by JetBlue as provided in such Sections. 
To the extent of JetBlue’s failure to pay any such fees, expenses and
disbursements, the Subordination Agent shall pay such amounts pursuant to the
Operative Documents.


 


(b)                                 Notwithstanding
anything herein to the contrary, all payments to be made by the Subordination
Agent under this Section 3.07 shall be made only from the amounts that
constitute Scheduled Payments, Special Payments or payments under Section 7
of the Participation Agreements and only to the extent that the Subordination
Agent shall have sufficient income or proceeds therefrom to enable the
Subordination Agent to make payments in accordance with the terms of the
Intercreditor Agreement.  The Policy
Provider agrees that with respect to payments to be made by the Subordination
Agent (i) it will look solely to such amount to the extent available for
distribution to it as provided in the Intercreditor Agreement, and
(ii) the Subordination Agent, in its individual capacity, is not
personally liable to it for any amounts payable or liability under this letter
except as expressly provided in the Intercreditor Agreement.


 


ARTICLE IV


 


FURTHER AGREEMENTS


 


Section 4.01                                Effective
Date; Term of the Insurance Agreement. 
This Insurance Agreement shall take effect on the Closing Date and shall
remain in effect until the later of (a) such time as the Policy Provider
is no longer subject to a claim under either Policy and each Policy shall have
been surrendered to the Policy Provider for cancellation and (b) all
amounts payable to the Policy Provider by JetBlue or the Subordination Agent
hereunder or from any other source hereunder or under the Operative Agreements
and all amounts payable under the


 


17

















 


Class G-1
Certificates and the Class G-2 Certificates have been paid in full;
provided, however, that the provisions of Section 3.04 hereof shall
survive any termination of this Insurance Agreement.


 


Section 4.02                                Further
Assurances and Corrective Instruments.  (a)  Neither
JetBlue nor the Subordination Agent shall grant any waiver of rights or agree
to any amendment or modification to any of the Operative Agreements to which
either of them is a party which waiver, amendment, or modification would have
an adverse effect on the rights or remedies of the Policy Provider without the
prior written consent of the Policy Provider so long as the Policy Provider
shall be the Controlling Party, and any such waiver without prior written
consent of the Policy Provider shall be null and void and of no force or
effect.


 


(b)                                 To
the extent permitted by law, each of JetBlue and the Subordination Agent agrees
that it will, from time to time, execute, acknowledge and deliver, or cause to
be executed, acknowledged and delivered, such supplements hereto and such
further instruments as the Policy Provider may reasonably request and as may be
required in the Policy Provider’s reasonable judgment to effectuate the
intention of or facilitate the performance of this Insurance Agreement.


 


Section 4.03                                Obligations
Absolute.  (a)  The obligations of JetBlue, the
Subordination Agent and the Class G Trustees hereunder and under the Operative
Agreements shall be absolute and unconditional and shall be paid or performed
strictly in accordance with this Insurance Agreement and the other Operative
Agreements under all circumstances irrespective of:


 


(i)                                     any
lack of validity or enforceability of, or any amendment or other modifications
of, or waiver, with respect to any of the Operative Agreements or the
Certificates;


 


(ii)                                  any
exchange or release of any other obligations hereunder;


 


(iii)                               the
existence of any claim, setoff, defense, reduction, abatement or other right
that any Person may have at any time against the Policy Provider or any other
Person;


 


(iv)                              any
document presented in connection with either Policy proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;


 


(v)                                 any
payment by the Policy Provider under either Policy against presentation of a
certificate or other document that does not strictly comply with terms of such
Policy;


 


(vi)                              any
failure of JetBlue to receive the proceeds from the sale of the Certificates; and


 


18

















 


(vii)                           any
other circumstances, other than payment in full, that might otherwise
constitute a defense available to, or discharge of, any Person in respect of
any Operative Agreements.


 


(b)                                 Each
of the parties hereto renounces the right to assert as a defense to the
performance of their respective obligations herein each of the following:  (i) to the extent permitted by law, any
and all redemption and exemption rights and the benefit of all valuation and
appraisement privileges against the indebtedness and obligations evidenced by
any Operative Agreements or by any extension or renewal thereof;
(ii) presentment and demand for payment, notices of nonpayment and of
dishonor, protest of dishonor and notice of protest; (iii) all notices in
connection with the delivery and acceptance hereof and all other notices in
connection with the performance, default or enforcement of any payment
hereunder, except as required by the Operative Agreements; and (iv) all
rights of abatement, diminution, postponement or deduction, or to any defense,
or to any right of setoff or recoupment arising out of any breach under any of
the Operative Agreements, by any party thereto or any beneficiary thereof, or
out of any obligation at any time owing to JetBlue.


 


(c)                                  JetBlue
(i) agrees that any consent, waiver or forbearance hereunder or in the
Operative Agreements with respect to an event shall operate only for such event
and not for any subsequent event; (ii) consents to any and all extensions
of time that may be granted by the Policy Provider with respect to any payment
hereunder or other provisions hereof and to the release of any security at any
time given for any payment hereunder, or any part thereof, with or without
substitution, and to the release of any Person or entity liable for any such
payment; and (iii) consents to the addition of any and all other makers,
endorsers, guarantors and other obligors for any payment hereunder, and to the
acceptance of any and all other security for any payment hereunder, and agree
that the addition of any such obligors or security shall not affect the
liability of JetBlue for any payment hereunder.


 


(d)                                 No
failure by the Policy Provider to exercise, and no delay by the Policy Provider
in exercising, any right hereunder or in the Operative Agreements shall operate
as a waiver thereof.  The exercise by
the Policy Provider of any right hereunder shall not preclude the exercise of
any other right, and the remedies provided herein to the Policy Provider are
declared in every case to be cumulative and not exclusive of any remedies
provided by law or equity.


 


(e)                                  Nothing
herein shall be construed as prohibiting any party hereto from pursuing any
rights or remedies it may have against any Person in a separate legal
proceeding.


 


Section 4.04                                Assignments;
Reinsurance; Third-Party Rights.  (a)  This Insurance
Agreement shall be a continuing obligation of the parties hereto and shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.  The
Subordination Agent, and except for any transaction expressly permitted by
Section 5.02 of the applicable Class G Trust Agreement, JetBlue, may
not assign their respective rights under this Insurance Agreement, or delegate
any of their duties hereunder, without the prior written consent of the other
parties hereto.  Any assignments made in
violation of this Insurance Agreement shall be null and void.


 


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(b)                                 The
Policy Provider shall have the right to grant participation in its rights under
this Insurance Agreement and to enter into contracts of reinsurance with
respect to the Policies upon such terms and conditions as the Policy Provider
may in its discretion determine; provided, however, that no such
participation or reinsurance agreement or arrangement shall relieve the Policy
Provider of any of its obligations hereunder or under either Policy or grant to
any participant or reinsurer any rights hereunder or under any Operative
Agreement.


 


(c)                                  Except
as provided herein with respect to participants and reinsurers, nothing in this
Insurance Agreement shall confer any right, remedy or claim, express or
implied, upon any Person, including, particularly, any Class G Certificateholder,
other than the Policy Provider against JetBlue, or JetBlue against the Policy
Provider, and all the terms, covenants, conditions, promises and agreements
contained herein shall be for the sole and exclusive benefit of the parties
hereto and their successors and permitted assigns.  Neither the Class G Trustees nor any Class G
Certificateholder shall have any right to payment from the Premium paid or
payable hereunder or from any amounts paid by JetBlue pursuant to
Sections 3.02 or 3.03.


 


Section 4.05                                Liability
of the Policy Provider.  Neither the Policy Provider nor any of
its officers, directors or employees shall be liable or responsible for:  (a) the use that may be made of either
Policy by the applicable Class G Trustee or for any acts or omissions of such
Class G Trustee in connection therewith; or (b) the validity, sufficiency,
accuracy or genuineness of documents delivered to the Policy Provider in
connection with any claim under either Policy, or of any signatures thereon,
even if such documents or signatures should in fact prove to be in any or all
respects invalid, insufficient, fraudulent or forged (unless the Policy
Provider shall have actual knowledge thereof). 
In furtherance and not in limitation of the foregoing, the Policy Provider
may accept documents that appear on their face to be in order, without
responsibility for further investigation.


 


ARTICLE V


 


MISCELLANEOUS


 


Section 5.01                                Amendments,
Etc.  This Insurance Agreement may
be amended, modified, supplemented or terminated only by written instrument or
written instruments signed by the parties hereto; provided that if such
amendment, modification, supplement or termination would have a material
adverse affect on the interests of the Subordination Agent, a Trustee or any
Class G Certificateholder, Ratings Confirmation shall also be obtained
prior to such amendment, modification, supplement or termination being
effective.  JetBlue agrees to provide a
copy of any amendment to this Insurance Agreement promptly to the Subordination
Agent and the rating agencies maintaining a rating on the Class G-1
Certificates and the Class G-2 Certificates. 
No act or course of dealing shall be deemed to constitute an amendment,
modification, supplement or termination hereof.


 


Section 5.02                                Notices.  All demands, notices and other
communications to be given hereunder shall be in writing (except as otherwise
specifically provided herein) and shall be mailed by registered mall or
personally delivered and telecopied to the recipient as follows:


 


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(a)                                  To
the Policy Provider:


 


MBIA Insurance
Corporation 

113 King Street 

Armonk, New York 10504 

Attention:  Insured Portfolio
Management, Structured Finance 

Facsimile:  (914) 765-3163 

Confirmation:  (914) 273-4949


 


(in each case in which
notice or other communication to the Policy Provider refers to an event of
default under any Operative Agreement or a claim on either Policy shall be
deemed to constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of the general counsel of
each of JetBlue and the Class G Trustees and, in all cases, both any original
and all copies shall be marked to indicate “URGENT MATERIAL ENCLOSED.”)


 


(b)                                 To
JetBlue:


 


JetBlue Airways
Corporation

118-29 Queens Boulevard

Forest Hills, New York 11375

Attention:  Vice President – Corporate
Finance

Facsimile:     (718) 709-3631


 


with a copy to:


 


JetBlue Airways
Corporation

118-29 Queens Boulevard

Forest Hills, New York 11375

Attention:  General Counsel

Facsimile:     (718) 709-3631


 


 


(c)                                  To
the Subordination Agent:


 


Wilmington Trust Company


Rodney Square North


1100 North Market Street


Wilmington, Delaware 19890-0001

Attention:      Corporate Trust Administration


 


Facsimile:      (302) 636-4140


 


A party may
specify an additional or different address or addresses by writing mailed or
delivered to the other parties as aforesaid. 
All such notices and other communications


 


21

















 


shall be effective upon
receipt unless received after business hours on any day, in which case on the
opening of business on the next Business Day.


 


Section 5.03                                Severability.  In the event that any provision of this
Insurance Agreement shall be held invalid or unenforceable by any court of
competent jurisdiction, the parties hereto agree that such holding shall not
invalidate or render unenforceable any other provision hereof.  The parties hereto further agree that the
holding by any court of competent jurisdiction that any remedy pursued by any
party hereto is unavailable or unenforceable shall not affect in any way the
ability of such party to pursue any other remedy available to it.


 


Section 5.04                                Governing
Law.  This Insurance Agreement shall
be governed by and construed in accordance with the laws of the State of New
York, including all matters of construction, validity and performance.  This Insurance Agreement is being delivered
in New York.


 


Section 5.05                                Consent
to Jurisdiction.  (a)  The parties hereto hereby irrevocably
submit to the non-exclusive jurisdiction of the United States District Court
for the Southern District of New York and any court in the State of New York
located in the City and County of New York, and any appellate court from any
thereof, in any action, suit or proceeding brought against it and to or in
connection with any of the Operative Agreements or the Transactions or for
recognition or enforcement of any judgment, and the parties hereto hereby
irrevocably and unconditionally agree that all claims in respect of any such
action or proceeding may be heard or determined in such New York state court
or, to the extent permitted by law, in such federal court.  The parties hereto agree that a final
unappealable judgment in any such action, suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. 
To the extent permitted by applicable law, the parties hereto hereby
waive and agree not to assert by way of motion, as a defense or otherwise in
any such suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such courts, that the suit, action or proceeding
is brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper or that the related documents or the subject matter
thereof may not be litigated in or by such courts.


 


(b)                                 To
the extent permitted by applicable law, the parties hereto shall not seek and
hereby waive the right to any review of the judgment of any such court by any
court of any other nation or jurisdiction which may be called upon to grant an
enforcement of such judgment.


 


(c)                                  Nothing
contained in this Insurance Agreement shall limit or affect any party’s right
to serve process in any other manner permitted by law or to start legal
proceedings relating to any of the Operative Agreements against any other party
or its properties in the courts of any jurisdiction.


 


Section 5.06                                Consent
of the Policy Provider.  No
disclosure relating to the Policy Provider contained in any Offering Document,
which disclosure modifies, alters, changes, amends or supplements the
disclosure relating to the Policy Provider provided by the Policy Provider for
use in the Offering Document, shall be made without the Policy Provider’s prior
written consent.  In the event that the
consent of the Policy Provider is required under any of the Operative
Agreements, the determination whether to grant or withhold such consent shall
be


 


22

















 


made by the Policy
Provider in its sole discretion without any implied duty towards any other
Person, except as otherwise expressly provided therein.


 


Section 5.07                                Counterparts.  This Insurance Agreement may be executed in
counterparts by the parties hereto, and all such counterparts shall constitute
one and the same instrument.


 


Section 5.08                                Headings.  The headings of Articles and
Sections and the Table of Contents contained in this Insurance Agreement
are provided for convenience only.  They
form no part of this Insurance Agreement and shall not affect its construction
or interpretation.


 


Section 5.09                                Trial
by Jury Waived.  Each party hereby
waives, to the fullest extent permitted by law, any right to a trial by jury in
respect of any litigation arising directly or indirectly out of, under or in
connection with this Insurance Agreement or any of the other Operative
Agreements or any of the Transactions contemplated hereunder or
thereunder.  Each party hereto
(A) certifies that no representative, agent or attorney of any party
hereto has represented, expressly or otherwise, that it would not, in the event
of litigation, seek to enforce the foregoing waiver and (B) acknowledges
that it has been induced to enter into the Operative Agreements to which it is
a party by, among other things, this waiver.


 


Section 5.10                                Limited
Liability.  No recourse under any
Operative Agreement shall be had against, and no personal liability shall
attach to, any officer, employee, director, affiliate or shareholder of any
party hereto, as such, by the enforcement of any assessment or by any legal or
equitable proceeding, by virtue of any statute or otherwise in respect of any
of the Operative Agreements, the Certificates or either Policy, it being
expressly agreed and understood that each Operative Agreement is solely a
corporate obligation of each party hereto, and that any and all personal
liability, either at common law or in equity, or by statute or constitution, of
every such officer, employee, director, affiliate or shareholder for breaches
of any party hereto of any obligations under any Operative Agreement is hereby
expressly waived as a condition of and in consideration for the execution and
delivery of this Insurance Agreement.


 


Section 5.11                                Entire
Agreement.  This Insurance
Agreement, each Policy, the Policy Fee Letter and the other Operative
Agreements set forth the entire agreement between the parties with respect to
the subject matter hereof and thereof, and supersede and replace any agreement
or understanding that may have existed between the parties prior to the date
hereof in respect of such subject matter.


 


Section 5.12                                Independent
Agreements.  This Insurance
Agreement and each Policy are separate and independent agreements.  No breach by any party hereto of any
representation, warranty, covenant, agreement or undertaking contained herein
shall in any way affect the obligations of the Policy Provider under either
Policy.


 


Section 5.13                                Successors
and Assigns.  This Insurance
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.


 


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INTENTIONALLY LEFT BLANK]


 


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IN WITNESS
WHEREOF, the parties hereto have executed this Insurance Agreement, all as of
the day and year first above mentioned.


 


	
   

  	
  MBIA INSURANCE CORPORATION,

  as Policy Provider

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Adam M. Carta

  
	
   

  	
  Name:  Adam
  M. Carta

  
	
   

  	
  Title:   
  Assistant Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST COMPANY,

  not in its individual capacity but solely as Subordination Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Janel R. Havrilla

  
	
   

  	
  Name: Janel R. Havrilla

  
	
   

  	
  Title:  
  Financial Services Officer

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST COMPANY, as Class

  G-1 Trustee and Class G-2 Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Janel R. Havrilla

  
	
   

  	
  Name: Janel R. Havrilla

  
	
   

  	
  Title:  
  Financial Services Officer

  
	
   

  	
   

  
	
   

  	
  JETBLUE
  AIRWAYS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Harvey

  
	
   

  	
  Name: John Harvey

  
	
   

  	
  Title:   VP
  Corporate Finance & Treasurer

  



 

















 


ANNEX A TO
INSURANCE AGREEMENT


 


INSURANCE


 


A.                                   Bodily
Injury Liability and Property Damage Liability Insurance.


 


1.                                       Except
as provided in paragraph 2 of this Section A, and subject to the self
insurance to the extent permitted by Section B hereof, JetBlue will at all
times carry and maintain or cause to be carried and maintained, at no expense
to any Additional Insured (as defined in the Indenture), on a
non-discriminatory basis, comprehensive airline liability insurance, including
passenger legal liability, bodily injury liability, property damage liability
and contractual liability (exclusive of manufacturer’s product liability
insurance and including, without limitation, aircraft liability war risk and
allied perils insurance, if and to the extent the same is maintained by JetBlue
(or Permitted Lessee (as defined in the Indenture)) with respect to other
Similar Aircraft (as defined in the Indenture) owned or leased, and operated by
JetBlue (or Permitted Lessee) on the same routes) with respect to the Aircraft
(a) in an amount per occurrence not less than the greatest of (x) the
amount of comprehensive airline legal liability insurance from time to time
applicable to aircraft owned or leased and operated by JetBlue of the same type
and operating on similar routes as the Aircraft (y) the amount of comprehensive
legal liability insurance from time to time applicable to aircraft owned or
leased and operated by air carriers with comparable route structures flying
similar aircraft on similar routes and (z) the Minimum Liability Insurance
Amount (as defined in the Indenture), (b) of the type and covering the
same risks as from time to time applicable to aircraft operated by JetBlue (or
any Permitted Lessee) of the same type which comprise JetBlue’s (or such
Permitted Lessee’s) fleet or owned or leased by air carriers with comparable
route structures flying similar aircraft on similar routes and (c) which
is maintained in effect with insurers or reinsurers of recognized
responsibility.  JetBlue shall maintain
cargo liability insurance in an amount not less than the amount of cargo
liability insurance maintained for other Similar Aircraft operated by JetBlue.


 


2.                                       During
any period that the Aircraft or an Engine is on the ground and not in
operation, JetBlue may carry or cause to be carried as to such non-operating
property, in lieu of the insurance required by paragraph 1 above, and
subject to the self-insurance to the extent permitted by Section B hereof,
insurance otherwise conforming to the provisions of said paragraph 1
except that (a) the amounts of coverage shall not be required to exceed
the amounts of bodily injury liability and property damage liability insurance
from time to time applicable to aircraft or engines, as the case may be, owned
or leased by JetBlue (or any Permitted Lessee) of the same or similar type as
the Aircraft or Engine, as the case may be, which comprise JetBlue’s (or such
Permitted Lessee’s) fleet or owned or leased by air carriers with comparable
route structures flying similar aircraft on similar routes and which are on the
ground and not in operation and (b) the scope of the risks covered and the
type of insurance shall be the same as from time to time shall be applicable to
aircraft or engines, as the case may be, owned or leased by JetBlue (or any
Permitted Lessee) of the same or similar type which comprise JetBlue’s (or such
Permitted Lessee’s) fleet or owned or leased by air carriers with comparable
route structures flying similar aircraft on similar routes and which are on the
ground and not in operation.


 


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B.                                     Self-Insurance.  JetBlue may self-insure, by way of
deductible, premium adjustment provisions in insurance policies, or otherwise,
under a program applicable to all aircraft in JetBlue’s fleet, the risks
required to be insured against pursuant to Section A hereof and
Section B of Annex B to each Indenture but in no case shall the
self-insurance with respect to the Aircraft exceed the lesser of (x) 50%
of the largest replacement value of any single aircraft in JetBlue’s fleet or
(y) 1.5% of the average aggregate insurable value (during the preceding
calendar year) of all aircraft on which JetBlue carries insurance, unless the
Insurance Broker shall certify that the standard among air carriers with
comparable route structures flying similar aircraft on similar routes is a
higher level of self-insurance, in which case JetBlue may self-insure the
Aircraft to such higher level; provided, however, that nothing contained in
this Section B limiting JetBlue’s right to self-insure shall be deemed to
apply to any mandatory minimum per aircraft (or, if applicable, per policy
period or per annum), hull or liability insurance deductible imposed by hull or
liability insurers that do not exceed industry standards for air carriers with
comparable route structures flying similar aircraft on similar routes.


 


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